LLC or to not LLC for tax benefits

[Ian Salinas]

This year is the first year I am filling taxes with my rental property. My tax preparer told me that I cannot really benefit from my rental write offs due to my W2 job. He advised that I should maybe look into putting my property into an LLC or maybe S-Corp. One issue is I have a loan on the property. I spoke to my lender and they advised that I can do a quick claim deed. I've been trying to do some research on what steps I need to take and possible ramifications on putting a property with a loan into an LLC. My questions are.

1. Is it a good idea to put a property with a loan into an LLC and is it even possible?

2. Can I take advantage of tax write offs from my property when my property is an LLC but the loan is still in my personal name?

[Ashish Acharya]

Originally posted by @Ian Salinas:

This year is the first year I am filling taxes with my rental property. My tax preparer told me that I cannot really benefit from my rental write offs due to my W2 job. He advised that I should maybe look into putting my property into an LLC or maybe S-Corp. One issue is I have a loan on the property. I spoke to my lender and they advised that I can do a quick claim deed. I've been trying to do some research on what steps I need to take and possible ramifications on putting a property with a loan into an LLC. My questions are.

1. Is it a good idea to put a property with a loan into an LLC and is it even possible?

2. Can I take advantage of tax write offs from my property when my property is an LLC but the loan is still in my personal name?

You are getting some bad/costly advice. 

Having the property in a LLC is not going to have any tax impact.

Your losses might be limited because your W-2 income is too high. Not even sure if it’s limited based on the advice you got. 

But if they are, they are just suspended, not lost. But if you have a spouse, she could possibly qualify as RE pro and you might be able to take the loss. With just one asset, might not happen.